Introduction

Two Rivers, a joint venture between Implats (45%) and
African Rainbow Minerals (ARM) (55%), is located on the
eastern limb of the Bushveld Complex, near the town of
Lydenburg. In terms of the joint venture agreement, ARM
manages the operation and Implats conducts the processing
and refining functions through IRS. Trial mining to determine the
most appropriate mining method began here in January 2004
and the boards of both Implats and ARM approved the start of
development in June 2005. At full production, projections are
for a maximum annual output of 2.4 million tonnes mined, to
yield an average of 120,000 ounces of platinum-inconcentrate
(220,000 ounces of PGMs) from the UG2
horizon.

Safety

Safety was maintained at acceptable levels during the year,
with an LTIFR of 1.22 per million man-hours being recorded.
There have been no fatalities on the project to date.

Operational review

Mining

Trackless (mechanised) bord-and-pillar mining is being
implemented. Development of the mining operation continues and
good progress has been made on the decline system. Nine of 12
half-levels are currently serviced by strike conveyors and a footwall
conveyor system with the capacity to transport 185,000 tonnes of
ore a month has been installed. Development will continue during FY2007 with steady state production of 2.4 million tonnes
scheduled for FY2008.

Key statistics  FY2006

Mineral Resources*

UG2 and Merensky

5.5 million platinum ounces

Mineral Reserves

UG2

2.4 million platinum ounces

Life-of-mine

20 years

Production  in build-up phase

Platinum-in-concentrate

90,000 ounces

Planned full production (FY2008)

Platinum-in-concentrate

120,000 ounces

Capital expenditure

FY2006

R1 billion

Number of employees

FY2006

1,000

* Inclusive of Mineral Reserves.

Processing

On surface, much of the work done during the year was to
complete the concentrator, a standard MF2 plant, in readiness for
its commissioning. This will take place during the first quarter of
FY2007, approximately a month ahead of schedule.

Following commissioning of the concentrator, the plant will
build-up to full capacity by October 2006 and will begin to
process the 1 million-tonne stockpile that has been
accumulated since the start of trial mining. The depletion of the
stockpile is scheduled to coincide with the build-up to full
production of the mining operation. Concentrate from the plant will be sent to IRS for toll treatment in terms of the life-of-mine
off-take agreement.

Outlook

Of the R1.6 billion originally planned to bring this project to full
production, R1 billion has been spent. The remainder will be
spent during the forthcoming financial year on the completion of
the Lydenburg housing development and capital development
scope, and in settlement of the construction contracts.

The mine currently has a forecast life of mine of 20 years at an
average annual production rate of 2.4 million tonnes. Based on this
rate of production and a grade of 3.4 g/t (3E + Au), annual
planned sales of PGMs are estimated at an average of 120,000
ounces of platinum-in-concentrate.